OUR VIEW: Fiscal smarts start at home

Sending a student to college this fall, or paying for your own schooling? Steep tuition and fees could make yours the latest household to reflect a troubling trend in American personal debt.

Sending a student to college this fall, or paying for your own schooling? Steep tuition and fees could make yours the latest household to reflect a troubling trend in American personal debt.

Way back in 1952, the debt of an average household was less than 40 percent of the family's disposable income. Those were the good old days. With the cost of education and housing rising faster than inflation, major sources of debt keep getting bigger. Today, average household debt is about 130 percent of disposable income.

Despite a drop in debt relative to disposable income in the first quarter of 2007 — the first in five years — the latest number of 130.7 percent is still the third-highest on record, according to the Center for American Progress, a self-described progressive think tank founded by a former chief of staff to President Bill Clinton.

The group reports that the personal savings rate of -0.7 percent in the first quarter completes two solid years of negative savings.

It comes as no surprise that Americans spend more than they save. While the rising cost of necessities accounts for a major portion of personal expenses, Americans also love to indulge in consumerism.

Although our lives are exceedingly busy — partly due, one might argue, to the need to earn more income to offset all those rising costs — we should set aside more time for financial literacy, and encourage young people to do the same. A college course in personal finance would go a long way toward making our grown children more money-savvy.

For those starting with the basics, one place to start is mymoney.gov, a project of the U.S. Financial Literacy and Education Commission. The Web site offers a free "My Money Tool Kit," a package of literature about saving, investing, Social Security, and fraud prevention, along with worksheets for calculating net worth, income, and expenses.

Folks without Internet access can call 1-888-696—6639 for the kit.

As Dartmouth heads to the polls today to see if the town will remedy its financial woes with a Proposition 2½ override, we should all remember that financial smarts begin at home.